Gap Insurance - Things You May be Unaware Of PDF Print E-mail
Written by Brenda Jones   
Friday, 19 March 2010 17:25
GAP insurance covers you if you irreparably damage your motor vehicle and your car insurance coverage doesn't pay enough to settle any outstanding lending on it or the price of replacing it.
by BrendaJones


GAP insurance covers you if you irreparably damage your motor vehicle and your car insurance coverage doesn't pay enough to settle any outstanding lending on it or the price of replacing it.

GAP stands for Guaranteed Asset Protection. There are several types of this insurance available in the market. They primarily cover the difference in the amount of money your car insurance pays out if the car is write-off compared with what you still owe on any loans or finance or the amount you must spend to replace the car.

GAP insurance is becoming significantly popular as a result of the high devaluation costs on cars and their falling resale prices.

Return to Invoice GAP insurance (RTI Gap Insurance). You can buy RTI GAP insurance for cars aged from new to 7 years old. However it can only be bought within 3 months of buying the car. It pays the difference between your car insurance claim settlement amount and the amount you paid for the car, the invoice amount for the car.

Return to Value GAP insurance (RTC Gap). You can buy RTV Gap insurance for cars less than 7 years old, but more than three months old. It repays the difference between your car insurance claim settlement and the value of your car at the time you took arranged the policy.

Finance GAP insurance. You can pay for Finance GAP insurance for cars bought on finance, using a finance transaction . It pays the difference between your car insurance claim settlement amount and the amount of your loan . This means the payout could be more than that from RTI GAP insurance. For extra comfort you can get combined RTI and Finance GAP cover from which you get then would have the highest amount possible.

Replacement GAP insurance. You can buy replacement GAP insurance to insure the cost of replacing your car with the same make and model as you originally bought. This can only be purchased for new or ex demo cars that are less than three months old and this insurance has to be arranged within ninety days of buying the car.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Now that you know what gap insurance is, click on this link for additional facts and figures about gap insurance.